I’m a proud owner of a Holden Cruze, 2 litre turbo diesel. Decent car. So you might mark me down as a supporter of the massive taxpayer support scheme that keeps Holden producing these cars in Australia, and for that matter Toyota producing its Camrys.

Not a bit of it. While decent, the Cruze is no better than most of the dozens of economy-priced, small to medium rental cars I drove in 2 ½ years in the United States.

In finish, fluidity and pick-up, it falls short of the better ones -- such as, for example, the Ford Fusion, a vehicle that company decided in its wisdom not to distribute in Australia.

In other words, the Cruze is a commodity vehicle, there is nothing special about it. Yet we are paying the highest manufacturing wages in the Pacific Rim -- our region -- to produce them, and subsidising the industry to the tune of hundreds of millions of dollars of taxpayers’ money a year to make it all possible.

As former Victorian Premier Jeff Kennett points out, if we put half those resources into the science and technology needed to develop leading edge agricultural produce -- an industry where we start with some advantages -- we might have a globally competitive industry. In cars, the most heavily subsidised industry in the world along with airlines and energy, that is a pipe dream.

How did we get to be subsidising the industry half a billion dollars a year to pay the highest manufacturing wages in the Pacific rim to produce commodity cars that hardly anyone else in the world wants to buy? How did we get to the point where, as Holden claims, it costs twice as much to build a car here as it does elsewhere in our region, and a good deal more than in Europe or America?

The Japanese used to pay the highest manufacturing wages in the Pacific, but they got cut down to size by an economic mugging. Then the Americans were paying the highest car-making wages, until they got cut down to size, halving the starting wages of new hires to $UA15 an hour.

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Answer that question, and you’ll be halfway to solving the conundrum of manufacturing in Australia: nearly everyone thinks it would be a good idea, but hardly anyone is prepared to level about the obstacles to achieving it.

Unfortunately, one of the obstacles has been the billions of dollars of taxpayer funding the industry has received over the years, which has merely allowed the local industry to keep going along its own uncompetitive path, tagging along at the tail end of the international productivity and innovation curve. Subsidised mediocrity.

The other is the inflexible union-mediated enterprise agreements, which the taxpayer support has supported. Holden and Toyota are only just getting around to conceding that these agreements are a millstone around their competitive necks.

Of course, one ready answer to the question of how we got here is that the Aussie dollar did it. True. the dollar’s surge is a good chunk of the industry’s woes. But that alone doesn’t explain why are carmakers are so uncompetitive even after importers overcome the fabled tyranny of distance and ship their vehicles to our shores.

The fact is our manufacturing workers have fallen behind in productivity as well, and over the long term, as the US Bureau of Labor Statistics excellent International Labor Costs series shows.

Growth in manufacturing output per hour in Australia was less than half the rate in the US and Sweden between 1979 and 2011, exactly half the rate in “basket-case" Japan, and a third or less of the rate in Singapore, Korea and Taiwan. Precisely the opposite of a “clever country" approach to manufacturing in a high wage country.

We should be sympathetic to the workers in the industry, whose livelihoods are on the line. They have been let down by their employers and union, and by successive governments, not least the recent Labor governments, who lulled them into a false sense of security about the sustainability of their uncompetitive, subsidised industry.

But the damage from weaning the car industry off its taxpayer dollars will not be nearly so great as the industry and its boosters -- with their exaggerated “multipliers" -- claim. If the workers are half as skilled as Labor industry spokesman Kim Carr makes out, those able to adapt will find other work.

If the Abbott government does feel compelled, after all this, to keep the taxpayer funded merry-go-round going, it should at-least insist that the industry be competitive within a few years.

That will involve rewriting the enterprise agreements, layoffs, more robots, labor hire and so on. Probably it will require new managers, since those responsible have obviously become too comfortable with the status quo.

But it should be the minimum requirement for continued taxpayer funding. There is no point, on heaven or earth, subsidising mediocrity.